It is 1 July, 2021. Hawk Ltd has a market capitalization rate (or required return)...
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It is 1 July, 2021. Hawk Ltd has a market capitalization rate (or required return) of 11%. Over 2021-22 (the financial year ending 30 June, 2022, the companys return on equity (ROE) is expected to be 16% and its earnings per share (EPS) is predicted to be $4.80. The firms plowback ratio is 30%.
I. Calculate, for Hawk Ltd:
i. The dividend payout ratio.
ii. The expected dividend at the end of 2021-22.
iii. The dividend growth rate (g).
iv. The theoretical share price at 1 July, 2021 (correct to the nearer cent). v. The P / E ratio.
II. Do the above answers suggest that an ordinary share purchase in Hawk Ltd is an attractive investment? Explain why.
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